Strategic Asset Allocation for Moderate Risk

John is a portfolio manager at a large asset management firm. He is in the process of developing a strategic asset allocation model for a balanced fund that targets an annual return of 6% with a moderate risk profile. To achieve this, he must determine the optimal mix of asset classes, including equities, bonds, and cash alternatives.

In his strategic asset allocation model, John has to account for both the expected returns and the correlations between the various asset classes, ensuring that the overall portfolio risk remains within acceptable limits. He’s considering three different allocations based on historical performance data.

Which of the following allocations would be most appropriate for achieving John's goal of a 6% annual return with moderate risk?